China to Probe Three Banks In Widening Default Inquiry

China widened its probe into last week’s shock bond default by a state-owned coal miner, saying on Thursday that three underwriting banks were suspected of misbehavior, Reuters reported. China’s interbank bond market regulator said in a statement it will launch investigations into Industrial Bank Co , China Everbright Bank and Zhongyuan Bank Co, which helped Yongcheng Coal & Electricity Holding Group issue bonds. The National Association of Financial Market Institutional Investors (NAFMII) said Xigema Certified Public Accountants and China Chengxin International Credit Rating Co are also suspected of violating rules. Yongcheng defaulted on a 1 billion yuan ($151.84 million) bond on Nov. 10, just weeks after it sold fresh debt, sparking a selloff in China’s corporate debt market. Read more

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